The following information was taken from a company's bank reconciliation at the end of the year: Bank balance $ 8,000 Checks outstanding $ 5,800 Note collected by the bank $ 1,500 Service fee $ 20 Deposits outstanding $ 4,000 NSF check $ 300 What is the correct cash balance that should be reported in the company's balance sheet at the end of the year?

The correct cash balance that should be reported is $6,200

Explanation:

In this question, we are asked to calculate the correct cash balance that is to be reported in a company’s balance sheet at the end of the year.

To do this, we employ the use of a mathematical formula.

Mathematically, cash balance = Bank balance + Outstanding deposits - Outstanding checks

From the question, we can identify the following;

Cash Balance = ?

Bank Balance = $8,000

Outstanding deposits = $4,000

Outstanding checks = $5,800

Imputing these values into the equation, we have;

Cash balance = 8,000 + 4,000 -5,800 = $6,200